It's a question we are asked often. So grab your favourite bevy, let's dive in, and take a look. Accurate financial records can make your life easier, regardless of whether you run a small business or a large multi-divisional company. For instance, having well-organized financial records can help you with tax preparation, bank requirements, loan qualification, payroll, sales tax, WSIB/WCB, and tax audits. It can also help you track how much your customers owe you.
At its most basic level, QuickBooks is a ledger tool that allows you to keep track of your customers, income and expenses, sales tax, inventory and reporting. It offers different plan levels starting with Easy Start to Advanced. The benefits a business derives from QuickBooks or any other digital accounting platform, depend on the plan level chosen and the expertise deployed in the set-up and data entry.
Beware! A disorganized structure, incorrect data inputs, unreconciled accounts, and inaccurate opening entries lead to garbage output and meaningless reports. Worthless data is very time-consuming and expensive to fix after the fact. This will negatively impact business growth, result in penalties, and cause increased stress and loss of profit.
A professional bookkeeper can provide better accuracy than Quickbooks alone in several areas. Let's look at a few examples;
Accuracy:
No matter how careful you are, mistakes happen. Quickbooks won't let you know when you've made a mistake because it doesn't know. The software wasn't created to detect user errors; it does assume you know what you're doing.
A properly trained human bookkeeper knows how to categorize income and expenses. Business owners don't typically understand what can and cannot be claimed, in what proportions and placed in what categories. The human bookkeeper will ensure an accurate audit trail. The finances of the business are reported accurately to support data-driven decisions.
Integrations:
Quickbooks can and should be enhanced with additional applications to improve the efficiency of business operations. The capabilities are endless. A qualified bookkeeping professional is uniquely positioned to recommend integrations with Payroll, POS systems, CRM platforms, Electronic timecards and paperless document hubs.
Taxes:
When you hire an Accountant to manage your finances, a professional bookkeeper will provide them with all the necessary year-end reports. The reports are reviewed by your accountant, who may make adjustments before filing your business taxes. Once this process is complete, the year-end will be formally closed within your Quickbooks file, ensuring the records cannot be altered by mistake.
To ensure accurate reporting of asset and liability accounts, a human bookkeeper will make the necessary adjustments to these accounts. These adjustments cannot be made by Quickbooks alone since it doesn't have the knowledge to identify what adjustments it needs to make.
Tax complications can arise for various reasons, such as; changes in business ownership or entity type, mergers or acquisitions, expansion into new markets, divestiture of a portion of the business, or downsizing operations. When any of these significant shifts occur, they often require the assistance of a tax professional to ensure accurate and compliant tax filings.
Risk Management:
Relying on unskilled, in-house employees to manage financial records can lead to a surge in negligent or fraudulent activities, resulting in undesired and expensive outcomes. The lack of skill, experience, unrealistic expectations, misplaced trust or a sense of family obligation are often the root causes.
Advice:
A qualified human bookkeeper on your team, who understands numbers, is crucial for making sound business decisions and effective planning. It is essential to have accurate financial input to ensure data-driven discussions around strategy, cash flow, hiring, tax, capacity and products and services. A skilled bookkeeper can identify and analyze trends offering proactive advice and recommendations for better decision-making. With their expertise, you have peace of mind knowing that your financial records are in good order and the information you need to make informed decisions is readily available.
Money Saved:
A remote, virtual bookkeeper doesn't take up valuable space in your office, and doesn't add to your payroll taxes or benefit plan. When a remote skilled professional is added to your team, the business benefits from affordable access to expertise that brings valuable insights and best practices. They contribute another level of expertise, valuable insights and best practices. This partnership scales with you as your business grows while allowing you to focus on what you do best.
Ambition:
Unless you are in the bookkeeping business, learning and keeping accurate records isn't your primary line of business. It takes time to learn how-to, to keep up with legislative changes, and squeeze out time for yourself and your family. Does this sound like a recipe for burnout?
Final Thoughts:
A skilled professional bookkeeper is an investment in your business. They understand numbers and can accurately report them, allowing you to focus, and do what you do best.
Wealth by Design is here to help. Visionary entrepreneurial business owners, that are passionate about growth and transformation are who we partner with. Embracing new ideas and always eager to learn from the experience of others, they recognize the importance of acknowledging their limitations and are committed to improving themselves and their organizations. These remarkable individuals are frustrated with the status quo, open-minded, eager to follow the process, and desire transformational growth.